G-III Apparel sales continue to climb, DKNY and Donna Karan strong

G-III Apparel's double-digit growth streak continued well into the third quarter with net sales up 16 percent at $1.02 billion, setting another quarterly record and exceeding expectations. As a result, the apparel company has once again increased its full year net income forecast.

G-III Apparel sales continue to climb in Q3 - Facebook: DKNYThe results follow a strong first and second quarter where net sales also climbed 21.6 percent and 16 percent, respectively.

Of the $1.02 billion in net sales last quarter, approximately $88 million came from the DKNY and Donna Karan brands, which was acquired last year from LVMH. The company also noted excellent wholesale net sales across all major brands in its third quarter. The company said net income for the third quarter increased to $81.6 million.

In addition to DKNY, the apparel group owns brands Vilebrequin, G. H. Bass, Andrew Marc, Marc New York, Eliza J and Jessica Howard, and holds fashion licenses under Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, and Cole Haan. The company also owns a team sports business and operates retail stores under several banners.

“We have executed our strategy with well-known brands and compelling product in an environment that remains challenging across our industry. Our products are selling well as we head into the holiday season and we expect to close the year with improved results and sustained momentum,” said Goldfarb.

“We have a growth strategy that works. We continue to own and align with great brands, control our distribution well, approach every relationship as a partner, and deliver to the consumer a truly outstanding range of product. These commitments have served us well and will continue to illuminate our path to long term success.”

Still, G-III Apparel’s year has not been without controversy.

In October, G-III Apparel Group’s stock fell in the wake of controversy surrounding Donna Karan’s support of Harvey Weinstein.

Though Donna Karan hasn’t been affiliated with her namesake brands since 2015, her response to the allegations that Harvey Weinstein had been sexually harassing women in Hollywood prompted a boycott of the Donna Karan and DKNY brands. The hashtag #BoycottDonnaKaran was launched on social media, which caused stock to fall more than 4 percent.

Karan stepped away from her labels in 2015, at which time they were owned by LVMH. In 2016, LVMH sold the brands to G-III for $650 million to focus on luxury labels such as Louis Vuitton and Givenchy, which LVMH also owns.

Meanwhile, in April, the company admitted to switching labels on Ivanka Trump’s apparel line with those of the Adrienne Vittadini brand. The company then sold the products to discount department store chain Stein Mart. G-III apologized for the decision in April.

Despite the label changes, the company still reported that sales for Ivanka Trump products grew by nearly 61 percent in 2016.

Moreover, in April, an industry watchdog released an audit accusing G-III Apparel Group of violating labor laws in China. The controversy again effected the Ivanka Trump line, which G-III produces under license.

Still, the company is clearly still in the green, raising its full year net income forecast

For the full year, the company still expects net sales of approximately $2.80 billion, but is now forecasting net income between $66 million and $71. G-III Apparel previously forecasted net income between $56 million and $60 million.

The company is now forecasting projected full-year adjusted EBITDA for fiscal 2018 between $188 million and $196 million compared to adjusted EBITDA of $148.1 million in fiscal 2017 and compared to its previous forecast of adjusted EBITDA of between $180 million and $188 million.